Correlation Between NEWELL RUBBERMAID and RCM TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both NEWELL RUBBERMAID and RCM TECHNOLOGIES at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NEWELL RUBBERMAID and RCM TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEWELL RUBBERMAID and RCM TECHNOLOGIES, you can compare the effects of market volatilities on NEWELL RUBBERMAID and RCM TECHNOLOGIES and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NEWELL RUBBERMAID with a short position of RCM TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWELL RUBBERMAID and RCM TECHNOLOGIES.
Diversification Opportunities for NEWELL RUBBERMAID and RCM TECHNOLOGIES
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NEWELL and RCM is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and RCM TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCM TECHNOLOGIES and NEWELL RUBBERMAID is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NEWELL RUBBERMAID are associated (or correlated) with RCM TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCM TECHNOLOGIES has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and RCM TECHNOLOGIES go up and down completely randomly.
Pair Corralation between NEWELL RUBBERMAID and RCM TECHNOLOGIES
Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to under-perform the RCM TECHNOLOGIES. But the stock apears to be less risky and, when comparing its historical volatility, NEWELL RUBBERMAID is 1.09 times less risky than RCM TECHNOLOGIES. The stock trades about 0.0 of its potential returns per unit of risk. The RCM TECHNOLOGIES is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,290 in RCM TECHNOLOGIES on September 3, 2024 and sell it today you would earn a total of 850.00 from holding RCM TECHNOLOGIES or generate 65.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEWELL RUBBERMAID vs. RCM TECHNOLOGIES
Performance |
| Timeline |
| NEWELL RUBBERMAID |
| RCM TECHNOLOGIES |
NEWELL RUBBERMAID and RCM TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWELL RUBBERMAID and RCM TECHNOLOGIES
The main advantage of trading using opposite NEWELL RUBBERMAID and RCM TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWELL RUBBERMAID position performs unexpectedly, RCM TECHNOLOGIES can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in RCM TECHNOLOGIES will offset losses from the drop in RCM TECHNOLOGIES's long position.| NEWELL RUBBERMAID vs. ANTA SPORTS PRODUCT | NEWELL RUBBERMAID vs. EIDESVIK OFFSHORE NK | NEWELL RUBBERMAID vs. SIEM OFFSHORE NEW | NEWELL RUBBERMAID vs. WT OFFSHORE |
| RCM TECHNOLOGIES vs. Compugroup Medical SE | RCM TECHNOLOGIES vs. CVR Medical Corp | RCM TECHNOLOGIES vs. MEDICAL FACILITIES NEW | RCM TECHNOLOGIES vs. KENEDIX OFFICE INV |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |